PM's solar song: stick it when the sun don't shine

Jock Cheetham

If there's one thing Australia has too much of, it's sunlight. Yet we don't have enough, according to Prime Minister Tony Abbott's mantra on renewable energy: "When the wind doesn’t blow and the sun doesn’t shine, well the power doesn’t flow".

But with solar panels 60 years old this year, and solar cells in the US costing a fifth of what they did in 2009, the answers to old questions are changing fast. And the solar industry sings a different tune to Mr Abbott about the potential of renewables for households and the national electricity supply.

Renewables such as solar energy are "a very good idea at one level", Mr Abbott has said, but "you’ve got to have back-ups", namely coal and gas. Mr Abbott's message is as consistent as the beating Australian sun ... delivered on Sydney's 2GB radio last week, in January, and last November.

At one level, Mr Abbott is right. To fully cash in on solar power, you need to use power from solar sources when the sun shines. Some households and many businesses can do this if their main use is during the day. Take airconditioning. The expensive peak electricity demand for air-conditioning occurs when the sun shines. This effect has actually driven down the profitable peak demand from power companies, hitting their profits, potentially feeding the death spiral for power companies.

In NSW, demand for batteries is likely to boom quite soon. Crunch time is January 1, 2017, when the NSW government's solar bonus program ends. Households with excess electricity from their solar panels will stop being well paid for power they return to the grid. They will then have a greater incentive to buy the cheaper batteries to store their solar energy, rather than selling it to the grid at a price well below the cost of buying it back.

Without batteries, the benefits depend on the pattern of electricity use. Households or businesses which use power during the day can realise their savings quickly, in four to five years, says the Australian Solar Council. The council ran a simulation for Fairfax Media using an independent energy calculator. The net cost of the 4.5kW rooftop system they modelled was $9000. The main assumptions were an electricity cost from the grid of 30 cents/kilowatt hour, rising at 7 per cent a year. The result was that over 20 years, the cost would average 56 cents/kWhr from the grid, compared with 12.4 cents/kWhr from solar. With savings like that, batteries move closer to viability.

The next innovation in renewables is solar storage, Mr Grimes said. "Molten salt is being used in several large solar-thermal plants in the US and Europe." The heat of the sun creates temperatures so hot that the salt liquefies. This heat is stored and can be drawn on at any time to heat water, create steam and generate electricity.

There's a conga-line of vested interests who stand against the incursion of solar and wind into the electricity market.

John Grimes, Australian Solar Council

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Vested interests

Mr Abbott's song on solar and other renewables "is not only short-sighted but dangerous from an economic point of view, and even more so in environmental terms", Mr Grimes said. "There's a conga-line of vested interests who stand against the incursion of solar and wind into the electricity market."

These interests include miners, the gas industry, coal-fired generators, network operators (which own poles and wires), retail operators and state governments (through their state-owned assets which generate revenue). Mr Abbott's song includes the line: "We’ve got massive supplies of coal, we’ve got massive supplies of gas; we should be making the most of our natural advantages."

This is big business. But as the battle rages between established businesses and disruptive new businesses, Australia risks falling behind the rest of the world, missing huge economic opportunities.